Softbank said to be in talks to buy Sprint Nextel

Shares of Sprint Nextel climbed more than 16 percent in premarket trading on a report that the company is in advanced talks to be acquired by Japanese cellphone company Softbank Corp. in a transaction valued at more than $12.8 billion.

The Wall Street Journal, citing an unnamed person with knowledge of the talks, said Thursday that the potential deal would help Softbank Corp. expand outside of Japan.

A Softbank representative says the story is “based on speculation” and added, “We do not comment on speculation.”

A Sprint representative could not be immediately reached for comment.

Tokyo-based Softbank, once the underdog in Japan’s telecom industry, has seen its fortunes improve ever since it started selling the iPhone in 2008. It was initially the only Japanese phone company to offer the iPhone. Rival KDDI Corp. started selling the iPhone late last year.

The report of the Softbank-Sprint talks comes a little over a week after T-Mobile and MetroPCS announced that they have agreed to combine their cellphone businesses in order to better compete against rivals like Sprint.

The combined company will use the T-Mobile brand and have about 42.5 million subscribers.

Deutsche Telekom AG, the German parent of T-Mobile USA Inc., will hold a 74 percent stake in the combined company, while MetroPCS Communications Inc.‘ shareholders will own the remainder. MetroPCS shareholders will also receive a payment of about $1.5 billion.

The deal, which is expected to close in the first half of 2013, still has to be approved by shareholders of both companies and requires government approval.